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What Do Unions Do to CEO Compensation?

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Author Info
Rafael Gomez
Konstantinos Tzioumis

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Abstract

In this paper we estimate the relation between union presence within a firm and CEOcompensation, using a unique panel of publicly listed companies for the period 1992 to 2001.We find that, on average, union presence: 1) is significantly associated with lower levels oftotal CEO compensation; 2) affects the mix of CEO compensation by providing higher levels ofbase pay but much lower stock option values; 3) lowers dispersion across the majorcomponents of CEO remuneration and 4) does not significantly reduce the performancesensitivity of CEO compensation as compared to non-union firms. These results are consistentwith several models of union influence.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0720.

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Date of creation: May 2006
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Handle: RePEc:cep:cepdps:dp0720

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Related research
Keywords: Unions; CEO compensation; implicit regulation;

Find related papers by JEL classification:
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
M54 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Labor Management

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